Takeaways: While cutting that many troops will save a bunch in salary costs, I wouldn’t expect their military spending to decrease. There will still be 2,000,000 men in their military services, and the funds are likely to be used for ‘rebalancing’ – shifted to the navy and air force to strengthen them (enabling better force projection abroad), and to increase technological spohistication (weapons and training).

We did a China topic about 20 years ago, when the army was actually much larger, and one of the interesting facts to emerge was that the PLA (People’s Liberation Army) wasn’t made up of just soldiers. As one of the most powerful institutions in China it had its fingers in a lot of businesses and industries, so that was where a significant number of ‘soldiers’ could be found. I suspect that business involvement is why the current anti-corruption purge has targeted (and removed) a number of top military officers in recent years.

Watch the development of their navy. So far they’ve been pretty much a brown-water navy (coastal coverage), but their aspirations (see: projection of force) is to be a blue-water navy (ocean capabilities). As a footnote in today’s news, five Chinese navy ships were spotted in the Bering Sea off the coast of Alaska. That’s a first.